This is research about Venture Capital Growth in Southern California from California State University Dominguez Hills. This research is the 2012 winner of the CSUDH Student Research Competition. It is also the winner of the 2012 CSU Statewide Student Research Competition. Abstract: Student Author: Bree Nguyen, CSUDH Faculty Mentor: Dr. Tayyeb Shabbir, CSUDH Department: Accounting and Finance Venture Capital Growth in Southern California: Becoming Silicon Valley Venture capital is an important driver of technology innovation and entrepreneurial undertakings in the United States and is responsible for funding high profile, revolutionary companies such as Google, Microsoft and Facebook. While venture capital is typically associated with Northern California’s Silicon Valley, in recent years, many other U.S. regions have emerged as centers for venture capital investments including Southern California. The primary goal of my research is to conduct an analysis of venture capital growth in Southern California in terms of venture capital dollars invested in the region, its relation to Silicon Valley and the viability of creating a So Cal ”Silicon Valley”. Past efforts to “recreate” Silicon Valley have failed – these factors will be analyzed and I will argue that the young venture capital market in Southern California can succeed. My study analyzes the venture capital growth in Southern California by focusing on two of the most rapidly growing funded industries in the region, Internet and Energy, and identifying regional and industry specific determinants of growth. The results reveal that there are determinants of growth that are unique to Southern California and unique to its industries. These determinants have strong correlations when analyzed together at a regional-industry level rather than individually. This study illustrates a model of venture capital growth unique to Southern California’s Internet and Energy industries to offer a different view than by using Silicon Valley as a model and a benchmark alone.

1. By: Bree Nguyen Faculty Mentor: Dr. Tayyeb Shabbir

2. Source: Thomson Reuters/PricewaterhouseCoopers Region 2010 Silicon Valley $8,513,442,800 39.0% Boston/New England $2,537,238,000 11.6% Southern California $2,431,050,700 11.1% Total $21,823,380,100

3. Source: Thomson Reuters/PricewaterhouseCoopers 2000 2010 % Change Silicon Valley 32.2% 39.0% 21.1% Boston/ New England 11.4% 11.6% 2.13% Southern California 8.6% 11.1% 29.9%

8. Source: socalTECH Venture Database 2010 # Of Deals Average Deal Size Silicon Valley 1204 $6.93m Southern California 451 $4.87m

9. Distribution of Venture Deals Source: socalTECH Venture Database Seed/Early $0-1.5m Expansion $1-10m $10-50m $50m+ Silicon Valley 40.2% 41.9% 16.4% 1.5% Southern California 43.0% 44.8% 11.8% 0.4%

10. Distribution of Venture Dollars Source: socalTECH Venture Database

11. Growth of Early Stage Funding Source: socalTECH Venture Database Early stage funding in Southern California of total funding